Car wash and detailing facilities are dealers' latest battleground

April 16, 2018 01:00 AM

Alan L. Adler

The car wash and detail center about to open at Matick Chevrolet shares key features with this facility at Hamilton (N.J.) Honda.

DETROIT — Karl Zimmermann cites 1.5 million potential reasons to justify his $7 million investment in a car wash and detail center at his dealership in the Detroit suburb of Redford. That's how many cars and trucks cross a busy intersection next to his store, Matick Chevrolet, each week.

The twin-tunnel automatic wash is scheduled to open next month on the 13-acre dealership site. Its 140-foot conveyors and 15 indoor detailing bays will be convenient for dirty cars passing by.

Zimmermann: New center to wash all vehicles

Zimmermann says he expects to book $2.5 million in revenue during the car wash's first full year. That figure does not include appointment-based full detailing, which can cost several hundred dollars per vehicle.

Although short of a trend, washing and detailing installations are gaining popularity among dealerships with large real estate footprints that can accommodate street traffic.

It's the latest in one-stop shopping at dealerships, and another way for them to compete with aftermarket providers. An on-site detailing facility also can expedite a dealership's reconditioning work.

Zimmermann estimates the new facility will provide 100,000 to 150,000 retail washes in its first full year. He also expects it to handle as many as 72,000 washes of the dealership's own vehicles, including new and used cars and trucks, service customers' vehicles and loaners.

He expects to charge an average of $10 a wash and $20 for express detailing. Service customers will get a free basic wash with a retail value of about $7, and can pay to upgrade. Prices for express service washes will range from $7 to $19, and express detailing from $15 to $40.

"We never had automated washing," says Zimmermann, who bought Matick Chevrolet in 2008. As its owner, he has built Matick into the seventh-ranked Chevrolet dealership in the nation in terms of retail vehicle sales, after a three-year renovation that ended in 2014. The store opened in 1967.

"We used to wash less than 5 percent of our vehicles," Zimmermann told Fixed Ops Journal. "Now, we're hopefully going to wash 100 percent of them."

Adding a retail car wash "is a no-brainer" for many franchised dealerships, says Lee Harkins, CEO of M5 Management Services Inc., a dealership consulting firm in Pelham, Ala., that specializes in fixed operations.

"Many stores are looking for additional revenue," Harkins says. "Think about what a customer needs: gas, tires, maintenance repair and cosmetic care. With this addition, the only thing the dealership may not offer is gas."

Cleanup detail

Matick Chevrolet in suburban Detroit is opening a $7 million car wash and detailing center next month. Some other numbers about the facility:

$2.5 million: Projected revenue in first full year

100,000-150,000: Number of estimated retail washes in first year

80: Full-time jobs expected to be created

15: Number of indoor detailing bays

140 feet: Length of wash tunnel

Source: Matick Chevrolet

Victor Thomas is a consultant with Washsense, a Philadelphia-area company that advises dealerships, including Matick, on designing and equipping car washes. He says Zimmermann's car wash "is taking it to a whole other level. He is building a mega-center."

Thomas is working with seven other dealerships that are adding standalone car washes. These installations, he says, are predictable extensions for dealerships that have discovered the marketing value of offering express service such as oil changes.

"You clean the cars better and faster," Thomas says. "If you've got the traffic flow for incoming and outgoing, it just builds up your volume."

He adds that the typical nondealership car wash handles 150,000 to 200,000 vehicles annually, averaging $18 to $25 each in total revenue for washing, detailing and related services.

All-star service

Thomas' clients include former NFL All-Pro linebacker Jessie Armstead, who opened a Honda dealership in Hamilton Township, N.J., in 2009. Its single-tunnel, 145-foot conveyor automatic wash made money from the turn of the first brushes four years ago.

Thomas says 140,000 vehicles used the Hamilton Honda car wash the first year, rising to more than 230,000 last year. "It's kind of maxed out," he says.

For a Honda dealership Armstead is building in Grapevine, Texas, a Dallas suburb, the car wash will have dual tunnel conveyors that are 200 feet long, Thomas says. The facility is scheduled to open late this year or in 2019.

Ricart Automotive, in the Columbus, Ohio, suburb of Groveport, is looking to add volume to the single tunnel wash it opened five years ago to handle the 3,000 Ford, Mazda, Hyundai, Kia, Nissan and Mitsubishi retail vehicles on its six lots.

Dan Bryan, the dealership group's service operations director, says Ricart also details 800 to 1,000 used vehicles a month.

Offering service customers a free wash and the opportunity to buy or upgrade monthly wash packages has helped increase satisfaction, Bryan says.

"Everybody's looking at profitability within the dealership right now," he says. "If we can invest in the equipment to keep those customers here, then it costs us less to get them to buy their next car."

Washday problems

There are cautionary tales, however. Dave Wright added a full-service public wash when he moved his Nissan-Subaru dealership from Cedar Rapids, Iowa, to nearby Hiawatha in 2015.

A property dispute that disrupted the layout of the new location led Wright to build a full-service public wash instead of one just for internal use, he says. The experience, he adds, "has been a big learning curve.

"Much like a dealership, it is very complex, with chemicals, labor, equipment maintenance and failure, software and customer expectations," Wright notes.

Wright almost immediately encountered operating issues. The local utility installed an improper electric transformer, believed to be the root cause of motor failures in the wash facility in recent months.

"Then we had a customer panic," he says. She "tried to drive out [of the wash], causing some significant equipment damage."

At the Matick dealership, Zimmermann says he expects the auto wash to create as many as 80 jobs.

Customers will be able to choose from a range of electronic payment methods. They will have access to an indoor lounge while their vehicles are detailed, along with free use of one of 23 self-service vacuum cleaners.

"Folks have less and less time available," Zimmermann says. "With the growing comfort with automation, this will be something that allows us to accommodate a large range of customers."